How an engaged CFO can have a profound impact on any organization
In recent years, the collection of C-Suite titles has expanded exponentially. It seems like every upper level manager has a “Chief” attached to their title. I have seen many creative uses of the title with the use of such words as “digital”, “visionary”, “knowledge” and others, inserted between the words “Chief” and “Officer”.
The use of CFO in an employee title was one of the earliest of this corporate titles convention and usually refers to the person in charge of finance, accounting and often legal aspects of an organization. Regardless of company size, the person in charge of finance, whether or not using the title of CFO has a tremendous responsibility not only to correctly report the actual financial results obtained by the company but also to oversee the planning process for the future and translate it into a meaningful and useful budget, one that allows periodic analytics and re-forecasting.
The CFO is ultimately responsible for the process that translates the vast amount of data that computerized accounting and operations so generously provide into concise and meaningful views of the organization, past, present and future. In collaboration with the CEO and often the Board of Directors, these views, represented by specific reports and other analysis to back them up, are used to make decisions that not only affect present events but can also have a profound effect on the future of the company.
The CFO, as part of her effort to maximize financial performance and shareholder value will use the best technology based financial systems that suit the size, industry and other specific needs of the organization. He will be part of the search effort for the right system and will be closely involved in its implementation.
It is the CFO who must be the decision maker when it is time to commit to the purchase and implementation of CPM or FP&A software solutions.
The engaged CFO will develop a deep understanding of how a properly designed and implemented solution will provide accurate insight into the financial health of the organization, past, present and future.
Developers of CPM or FP&A software must realize that even though the entire work performed using their software will be done by finance professionals, financial analysts and other accounting and finance personnel, it is the CFO (or VP of Finance in some companies), along with the CEO who are the ultimate users of much of the system output.
As such, vendors of CPM and FP&A software should always strive to get CFO buy-in on their product and service offerings, especially if their solutions are designed to offer insight into the company’s future financial health through future period balance sheets and statements of cash flows which are always synchronized to the forecasted income statements and the underlying budget.
The CFO should realize that software only designed to benefit the financial analysts and budget administrators may be detrimental to the overall objective which is providing accurate and timely insight into the financial state of the company. Unfortunately, most of the CPM software applications cannot go reliably beyond a forecasted P&L.
The CFO must find a solution that seamlessly integrates with the organization’s ERP software and with its built-in analytics to allow almost in real time to monitor actual results against a budget and periodic re-forecast.
Another important role of the engaged CFO is empowering the finance organization with tools that will not only make employees’ jobs easier and more efficient, but also contribute to their finding personal satisfaction in doing a good job and aligning their goals with their company’s goals.
An engaged CFO will undoubtedly contribute to improved employee engagement within his department and the overall increased performance within many parts of the organization.